§1031 — Title 18 Crimes and Criminal Procedure | U.S. Code

Summary

It makes it a crime to knowingly carry out or try a plan to cheat the United States or to get money or property by lying or false promises. Courts can punish people with larger fines than usual: up to $5,000,000 when the government lost $500,000 or more or when the crime risked serious injury, and no more than $10,000,000 total for a defendant facing many counts. The court can also use other punishments allowed by law, including a fine up to twice the amount of the government’s loss or the defendant’s gain. In deciding the fine, the judge must consider the rules and factors in 18 U.S.C. 3553 and 3572 and the federal sentencing guidelines, including how serious the harm was, whether the person was fined before for similar conduct, and other fair factors. Prosecution must start within 7 years after the offense, plus any extra time the law allows. The Attorney General may pay up to $250,000 from Justice Department funds to people who give useful information leading to a possible prosecution. Some people cannot get a payment: government employees acting under their jobs, people who didn’t first tell their employer (unless there was a good reason), people whose tip comes only from public reports unless they were the original source, or anyone who took part in the crime. The Attorney General’s decision not to pay cannot be reviewed by a court. An employee who is punished at work for lawfully helping a prosecution, and who did not take part in the wrongdoing, can sue and recover relief such as reinstatement with the same seniority, twice the back pay, interest, and other damages including legal fees.

Title 18, §1031

Crimes and Criminal Procedure — Source: USLM XML via OLRC

(a)Whoever knowingly executes, or attempts to execute, any scheme or artifice with the intent—

(1)to defraud the United States; or

(2)to obtain money or property by means of false or fraudulent pretenses, representations, or promises,

(b)The fine imposed for an offense under this section may exceed the maximum otherwise provided by law, if such fine does not exceed $5,000,000 and—

(1)the gross loss to the Government or the gross gain to a defendant is $500,000 or greater; or

(2)the offense involves a conscious or reckless risk of serious personal injury.

(c)The maximum fine imposed upon a defendant for a prosecution including a prosecution with multiple counts under this section shall not exceed $10,000,000.

(d)Nothing in this section shall preclude a court from imposing any other sentences available under this title, including without limitation a fine up to twice the amount of the gross loss or gross gain involved in the offense pursuant to 18 U.S.C. section 3571(d).

(e)In determining the amount of the fine, the court shall consider the factors set forth in 18 U.S.C. section 3553 and 3572, and the factors set forth in the guidelines and policy statements of the United States Sentencing Commission, including—

(1)the need to reflect the seriousness of the offense, including the harm or loss to the victim and the gain to the defendant;

(2)whether the defendant previously has been fined for a similar offense; and

(3)any other pertinent equitable considerations.

(f)A prosecution of an offense under this section may be commenced any time not later than 7 years after the offense is committed, plus any additional time otherwise allowed by law.

(g)(1)In special circumstances and in his or her sole discretion, the Attorney General is authorized to make payments from funds appropriated to the Department of Justice to persons who furnish information relating to a possible prosecution under this section. The amount of such payment shall not exceed $250,000. Upon application by the Attorney General, the court may order that the Department shall be reimbursed for a payment from a criminal fine imposed under this section.

(2)An individual is not eligible for such a payment if—

(A)that individual is an officer or employee of a Government agency who furnishes information or renders service in the performance of official duties;

(B)that individual failed to furnish the information to the individual’s employer prior to furnishing it to law enforcement authorities, unless the court determines the individual has justifiable reasons for that failure;

(C)the furnished information is based upon public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or GAO report, hearing, audit or investigation, or from the news media unless the person is the original source of the information. For the purposes of this subsection, “original source” means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government; or

(D)that individual participated in the violation of this section with respect to which such payment would be made.

(3)The failure of the Attorney General to authorize a payment shall not be subject to judicial review.

(h)Any individual who—

(1)is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by an employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of a prosecution under this section (including investigation for, initiation of, testimony for, or assistance in such prosecution), and

(2)was not a participant in the unlawful activity that is the subject of said prosecution, may, in a civil action, obtain all relief necessary to make such individual whole. Such relief shall include reinstatement with the same seniority status such individual would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorney’s fees.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Emergency Economic Stabilization Act of 2008, referred to in subsec. (a), is div. A of Pub. L. 110–343, Oct. 3, 2008, 122 Stat. 3765, which is classified principally to chapter 52 (§ 5201 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see

Short Title

note set out under section 5201 of Title 12 and Tables.

Amendments

2009—Subsec. (a). Pub. L. 111–21, in concluding provisions, inserted “any grant, contract, subcontract, subsidy, loan, guarantee, insurance, or other form of Federal assistance, including through the Troubled Asset Relief Program, an economic stimulus, recovery or rescue plan provided by the Government, or the Government’s purchase of any troubled asset as defined in the Emergency Economic Stabilization Act of 2008, or in” before “any procurement”, substituted “such grant, contract, subcontract, subsidy, loan, guarantee, insurance, or other form of Federal assistance” for “the contract, subcontract”, and struck out “for such property or services” before “is $1,000,000”. 1994—Subsec. (g). Pub. L. 103–322, § 330002(f), redesignated second subsec. (g) as (h). Subsec. (g)(2)(A). Pub. L. 103–322, § 330002(a), substituted “a Government” for “a government”. Subsec. (h). Pub. L. 103–322, § 330002(f), redesignated second subsec. (g) as (h). 1989—Subsec. (g). Pub. L. 101–123 added, after subsec. (f), subsec. (g) relating to payments by the Attorney General.

Statutory Notes and Related Subsidiaries

Effective Date

of 1989 Amendment Pub. L. 101–123, § 2(b), Oct. 23, 1989, 103 Stat. 759, provided that: “The amendment made by this section [amending this section] shall apply to contracts entered into on or after the date of the enactment of this Act [Oct. 23, 1989].”

§1031 Major fraud against the United States